Sprouts Farmers Market LLC (SFM)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 511,704 | 350,231 | 360,381 | 334,076 | 391,665 |
| Interest expense | US$ in thousands | 5,006 | 6,491 | 9,047 | 11,684 | 14,787 |
| Interest coverage | 102.22 | 53.96 | 39.83 | 28.59 | 26.49 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $511,704K ÷ $5,006K
= 102.22
To analyze Sprouts Farmers Market LLC's interest coverage ratio based on the provided data, we observe a consistent upward trend from December 31, 2020, to December 31, 2024. The interest coverage ratio represents the company's ability to meet its interest payments on outstanding debt.
As of December 31, 2020, Sprouts Farmers Market LLC had an interest coverage ratio of 26.49, indicating that the company's earnings were 26.49 times greater than its interest expenses for that period. Over the subsequent years, this ratio improved significantly, reaching 102.22 by December 31, 2024. This indicates a substantial enhancement in the company's ability to cover its interest obligations with its earnings.
The increasing trend in the interest coverage ratio suggests that Sprouts Farmers Market LLC has been effectively managing its interest expenses relative to its operating income. A higher interest coverage ratio is generally considered favorable as it signifies a lower risk of default on debt payments.
Overall, the consistent improvement in Sprouts Farmers Market LLC's interest coverage ratio over the years demonstrates a strengthening financial position and the company's ability to comfortably meet its interest obligations through its earnings.
Peer comparison
Dec 31, 2024